Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the level and terms of our substantial indebtedness and our ability to service such debt; our entry into the chemicals technology business through our acquisition of Atotech Limited ("Atotech”) in August 2022 (the "Atotech Acquisition”), which has exposed us to significant additional liabilities; the risk that we are unable to realize the anticipated benefits of the Atotech Acquisition; risks related to cybersecurity, data privacy and intellectual property; competition from larger, more advanced or more established companies in our markets; the ability to successfully grow our business, including through growth of the Atotech business, and financial risks associated with that acquisition and potential future acquisitions, including goodwill and intangible asset impairments; manufacturing and sourcing risks, including those associated with limited and sole source suppliers and the impact and duration of supply chain disruptions, component shortages, and price increases; changes in global demand; risks associated with doing business internationally, including geopolitical conflicts, such as the conflict in the Middle East, trade compliance, trade protection measures, such as import tariffs by the United States or retaliatory actions taken by other countries, regulatory restrictions on our products, components or markets, particularly the semiconductor market, and unfavorable currency exchange and tax rate fluctuations, which risks become more significant as we grow our business internationally and in China specifically; conditions affecting the markets in which we operate, including fluctuations in capital spending in the semiconductor, electronics manufacturing and automotive industries, and fluctuations in sales to our major customers; disruptions or delays from third-party service providers upon which our operations may rely; the ability to anticipate and meet customer demand; the challenges, risks and costs involved with integrating or transitioning global operations of the companies we have acquired; risks associated with the attraction and retention of key personnel; potential fluctuations in quarterly results; dependence on new product development; rapid technological and market change; acquisition strategy; volatility of stock price; risks associated with chemical manufacturing and environmental regulation compliance; risks related to defective products; financial and legal risk management; and the other important factors described under the heading "Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and any subsequent Quarterly Reports on Form 10-Q, each as filed with the U.S.
Schedule Reconciling Selected Non-GAAP Financial Measures(In millions, except per share data) Three Months Ended March 31, December 31, March 31, 2025 2024 2024Net income$52 $90 $15 Acquisition and integration costs — 3 1 Restructuring and other 16 1 3 Amortization of intangible assets 60 61 62 Loss on extinguishment of debt 3 4 9 Amortization of debt issuance costs 5 5 6 Fees and expenses related to amendments to the Term Loan Facility 2 — 3 Tax effect of Non-GAAP adjustments (22) (18) (20)Non-GAAP net earnings$116 $146 $79 Non-GAAP net earnings per diluted share$1.71 $2.15 $1.18 Weighted average diluted shares outstanding 67.7 67.7 67.4 Net cash provided by operating activities$141 $176 $67 Purchases of property, plant and equipment (18) (51) (18)Free cash flow$123 $125 $49 GAAP and Non-GAAP gross profit$444 $441 $415 GAAP and Non-GAAP gross margin 47.4% 47.2% 47.8%Operating expenses$332 $306 $309 Acquisition and integration costs — 3 1 Restructuring and other 16 1 3 Amortization of intangible assets 60 61 62 Fees and expenses related to amendments to the Term Loan Facility 2 — 3 Non-GAAP operating expenses$254 $242 $240 Income from operations$111 $135 $106 Operating margin 11.9% 14.5% 12.2%Acquisition and integration costs — 3 1 Restructuring and other 16 1 3 Amortization of intangible assets 60 61 62 Fees and expenses related to amendments to the Term Loan Facility 2 — 3 Non-GAAP income from operations$189 $199 $175 Non-GAAP operating margin 20.2% 21.3% 20.2%Interest expense, net$50 $49 $81 Amortization of debt issuance costs 5 5 6 Non-GAAP interest expense, net$45 $45 $75 Net income$52 $90 $15 Interest expense, net 50 49 81 Other (income) expense, net (1) 3 (3)Provision (benefit) for income taxes 7 (11) 4 Depreciation 25 26 26 Amortization 60 61 62 Stock-based compensation 22 11 15 Acquisition and integration costs — 3 1 Restructuring and other 16 1 3 Loss on extinguishment of debt 3 4 9 Fees and expenses related to amendments to the Term Loan Facility 2 — 3 Adjusted EBITDA$236 $237 $217 Adjusted EBITDA margin 25.2% 25.3% 25.0% MKS Instruments, Inc.
We remain focused on managing profitability and cash generation to delever and strengthen our balance sheet.” Selected GAAP and Non-GAAP Financial Measures(In millions, except per share data) Q1 2025 Q4 2024 Q1 2024Net Revenues Semiconductor$413 $400 $351 Electronics & Packaging 253 254 208 Specialty Industrial 270 281 309 Total net revenues$936 $935 $868 GAAP Financial Measures Gross margin 47.4% 47.2% 47.8%Operating margin 11.9% 14.5% 12.2%Net income$52 $90 $15 Net income per diluted share$0.77 $1.33 $0.22 Non-GAAP Financial Measures Gross margin 47.4% 47.2% 47.8%Operating margin 20.2% 21.3% 20.2%Net earnings$116 $146 $79 Net earnings per diluted share$1.71 $2.15 $1.18 Additional Financial Information At March 31, 2025, the Company had $655 million in cash and cash equivalents, $3.2 billion of secured term loan principal outstanding, $1.4 billion of convertible senior notes outstanding and up to $675 million of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements.
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